UK Employment Law Changes 2025: Key Reforms Every Employer Should Know

Overview of the 2025 Employment Law Reforms

In 2025, the UK government introduced a series of major employment law changes aimed at improving worker rights and increasing employer accountability. These new legal requirements affect businesses of all sizes and are intended to promote fairness, equality, and stability in the workplace.

Understanding these reforms is essential for employers seeking to remain compliant with UK employment legislation and minimise the risk of legal disputes.

1. Ban on Zero-Hours Contracts

One of the most significant changes in UK employment law in 2025 is the prohibition of zero-hours contracts. Employers are now required to provide contracts with guaranteed minimum weekly working hours. Additionally, workers must receive compensation for last-minute shift cancellations, offering more financial stability and predictability.

This change aims to combat precarious working conditions and protect workers from exploitative scheduling practices.

2. Increase in Statutory Sick Pay

The weekly Statutory Sick Pay (SSP) entitlement has increased to £118.75, providing enhanced support to employees during periods of illness. Employers must ensure their payroll systems reflect the new rate and that staff policies are updated accordingly.

This update forms part of the government’s broader strategy to improve employee welfare and reduce financial insecurity during periods of absence.

3. Strengthened Anti-Harassment Duties

As of 2025, employers are under a statutory duty to take all reasonable steps to prevent harassment in the workplace. This includes:

• Implementing robust diversity, equity, and inclusion (DEI) policies
• Providing anti-harassment training for staff
• Establishing clear internal reporting and complaints procedures

Failing to take proactive measures could result in increased liability and reputational damage.

4. New Equal Pay Enforcement and Reporting Requirements

A new enforcement body has been established to investigate pay disparities not only related to gender but also race and disability. Employers with more than 250 employees are now legally required to:

• Conduct ethnicity pay gap and disability pay gap reporting
• Publish pay data annually
• Demonstrate steps taken to reduce unjustified disparities

This measure promotes transparency and helps create a more equitable workplace.

What Employers Need to Do Now

Employers are advised to take the following steps in response to the 2025 employment law reforms:

• Review and update employment contracts to remove unlawful zero-hours provisions
• Adjust payroll systems to reflect new sick pay rates
• Provide anti-harassment training and update HR policies
• Conduct pay audits and prepare for expanded pay gap reporting requirements

Legal Support for Employers

At Forest & Co, our employment law team provides practical legal advice to help businesses stay compliant with the latest legislation. We assist with policy reviews, contractual updates, workplace training, and all aspects of HR legal support.